said, to finish the transaction, and except that in two instances out of five, the acceptances given by the defendants were payable two days before the counter acceptances of the plaintiffs, it was held that this was an absolute exchange of acceptances; that each party's remedy was upon the bills given by the other only, and that the defendants having become bankrupts, and the plaintiff consequently forced to pay the balance of his own acceptances, (beyond the dividend received from the defendant's estate,) could not recover that amount in an action against the defendants for money paid. Buckler v. Buttivant, 3 East, 72.

Where in case of cross acceptances, one of the parties has become bankrupt it has been made a question, whether the proof of his acceptance can be allowed before the other party has satisfied his own, or whether he shall merely be restrained from receiving the dividends until such satisfaction. In re Boroness, Co. B. L. 161. In one case it is said by Mansfield C. J., that until the party proving has paid his counter bill, the court of Chancery will restrain him from receiving any dividend. Sarratt v. Austin, 4 Taunt. 207. Ante, p. 320. Where bankers accepted bills for a customer, and advanced money, and discounted bills for him, and the customer became bankrupt, and the bankers at the time of the commission were under acceptances for the bankrupt, and had bills drawn by the bankrupt and accepted by different persons, remitted by their customer before his bankruptcy, and the bankers proved as upon a balance of accounts, the Chancellor held, that though the form of the proof was wrong, yet, that the bankers were intitled to prove the bills upon which the bankrupt's name appeared, to cover their acceptances which had not been made good. Ex parte Bloxham, 8 Ves. 531. It is said that it seems now to be a settled rule, that the surety claiming to come in as a creditor, must, before he can be permitted to prove, take up his own bills or exonerate the bankrupt's estate from the original debt. Eden's B. L. 150. 2d Ed.

Proof of bills where there are cross bills and a cash account, and both the parties become bankrupt.] Several cases have arisen as to the proof of debts, where there have been cross bills negotiated between the parties, and where there is also a cash account, and both of the parties have become bankrupt. Of some of these cases it is extremely difficult to discover the principle. Various accommodation transactions had for many years taken place between Caldwell & Co. and the Brownes. The former were the bankers of the latter. A commission of bankruptcy issued against Caldwell & Co., in March 1793, and in the same month the Brownes became bankrupt. An account was then taken of the mutual debts and credits. That account consisted first of a cash account, which included good bills as well as payments in cash ;

and secondly, of a bill account, which related exclusively to bills which had beeen passed by one house to the other, and which were all ultimately dishonored. The result was, that on the cash account the Brownes were indebted to Caldwell & Co., in the sum of 40,716l., and that, on the bill account, Caldwell & Co. had received from the Brownes bad bills, to the amount of 305,1497. 19s. 10d., and the Brownes had received from Caldwell & Co. bad bills to the amount of 204,9101. 5s. Of the bad bills, received from Caldwell & Co., the Brownes had negotiated bills to the amount of 196,5891. 6s. 4d. and of those received from the Brownes, Caldwell & Co. had negotiated bills to the amount of 126,855l. 11s. 10d. having retained the residue, viz. 178,2941. 8s., at the request of the Brownes. All the bills received by the Brownes were discountable, and upon most of them they had received the full value, and Caldwell & Co, had no consideration for them, but the bad bills received from the Brownes. All the bills (or nearly so)which the Brownes had negotiated were proved against the estate of Caldwell & Co., and by far the greater part against the estate of the Brownes also; but to a large amount viz. 80,000l. the Brownes had deposited bills as a security for the payment of a much smaller sum, so that the proof against them in respect of those bills was only for the sum really due, whereas against Caldwell & Co. the proof was for the whole sum payable on the bills; and the consequence of this, and of the unequal negotiation of each other's bills was, that a much larger sum was proved against Caldwell & Co., in respect of bills negotiated by the Brownes, than against the latter in respect of bills negotiated by the former. Caldwell & Co. on petition, claimed the right to prove the bills which still remained in their hands, in order to be reimbursed the difference. But Lord Loughborough C. said, "Till Caldwell & Co. pay all the creditors of Browne, who are likewise creditors of theirs, 20s. in the pound, they would be, by proving, sharing with the creditors of Browne, who are likewise creditors of theirs. If I allow this petition, I must do two things that are quite impossible. I must hold that the bankruptcy creates a debt which did not exist antecedently; and I must hold, that the same debt may be proved twice.' The proof was confined to the balance of the cash account only. Ex parte Walker, 4 Ves. 373. as abstracted by Mr. Justice Bayley, not only from Mr. Vesey's, but from Mr. Cooke's, report of the case. Bayley, 350. So where a petition was presented by the assignees of a bankrupt, the object of which was similar to that of the petition, Er parte Walker (supra), to prove, not only for the cash balance between the two bankrupts' estates, but also in respect of the dishonored bills, upon a similar issue of cross paper dishonored on both sides, part of which having been negotiated, was proved by the holders against both estates, Lord Loughborough, C. said, "Upon the consideration of the case, Ex parte Walker, it

struck me, that there were but two ways of taking it as between the two estates, either to consider all the bills as struck out of the case entirely, as issued for a bad purpose, like gambling transactions, &c. upon which there could be no proof, or to consider them all as good bills. I do not see that there is a middle course." The order was pronounced, that the petitioners should be at liberty to prove the cash balance only. Er parte Earle, 5 Ves. 833. The principle of the two foregoing decisions was much canvassed by Lord Eldon in the case of Ex parte Rawson, 1 Jacob, 274. His Lordship there said, I think I argued that case of Ex parte Walker, and I must say that the speculations about paper, certainly outran the grasp of the wits of courts of justice. This sort of circulating medium puzzled as able a man as ever sat here, Lord Thurlow. I remember the first case of it. It was then small in amount, one bill and another. He then considered the acceptance of the one as a consideration for the other, and allowed both to prove, but then there was this difficulty, that it lessened the fund for paying the holder of the bill, and thus by proving, they prejudiced their own creditors. It was found this would not do, and then it was said, if you will prove, you must first take up your acceptance,' which got rid of the objection of the party proving in competition with his own creditor. Then came the case of those houses at Liverpool and Manchester drawing on one another to the amount of 50,000l. What was to be done then? The court were puzzled and distressed. At last, however, we came to a sort of anchorage in that case, Ex parte Walker; I have no difficulty in saying that I never understood it: I am satisfied that though no doubt the court understood that judgment, yet none of the counsel did. The decision was this: that where there are cross bills drawn for accommodation, they are all to be thrown out of the account on both sides, and it is to be taken as if it were a cash balance only. If this were upon the principle that applies to one or two bills, that they are not to be proved by one estate against the other till all the creditors of both are paid, I could understand it. If there be 1000l. of acceptances on the one side, and 10,000l. on the other, Lord Loughborough says that they are not to be regarded at all, that it is all chance how the two estates may pay. I say not; and if there be a surplus of one estate to satisfy the other, why should it not be applied? Look at the case of partnership; a partner cannot prove against the estate of his copartner, so as to affect the creditors of both, but he may be paid his demand out of the surplus, if there is any. I do not see why the same rule is not to be applied here." His Lordship at the conclusion of his judgment observed, "I cannot bring myself to think that the case of Ex parte Walker is right, if there is a surplus." In the following case there were no cross bills, but dishonored bills on one side were struck out of the ac

"To

count. Palmer received from Williamson in cash and bills, 64241. 9s. 3d., and Williamson received from Palmer in cash 58241. 19s. 7d. Both became bankrupt. Palmer had negotiated the bills, some of which, drawn by Williamson, to the amount of 10981. were refused acceptance, and were proved under both commissions. Palmer's assignees contended that the 10987. should be deducted from the 6424l. 9s. 3d. which would reduce the sum received by him, and would leave a balance of 4981. 10s. 4d. in his favour, which they petitioned to be allowed to prove against Williamson's estate. Lord Eldon, C. after considering how the question would stand in case the parties had not become bankrupt, said "If between these parties considered as solvent, Williamson is entitled to say Palmer should not have the 4981. until he had restored the bill, being put into his hands as a medium of raising money, and the first obligation was upon Palmer, what difference does the bankruptcy make? No other difference than this; that if the assignees of Williamson protect his estate against any liability upon the bill, Palmer's estate is entitled to a dividend upon the sum of 4981. that is, in order to keep the accounts finally right, Williamson's estate is entitled to retain the dividends due to Palmer's estate, to the extent of making them applicable to protect the estate of Williamson against the bill." alter this decision," added his Lordship, "it must be shewn not only that the bills were accepted by Goodenough (the drawee) but that they were accepted on account of what the acceptor owed to Williamson." Ex parte Metcalfe, 11 Ves. 404. At the time of the bankruptcy of Lynn, the account between him and the petitioner Read stood thus: there was a cash balance of 3,576l. 8s. 4d. including therein a sum of 1,6031. 17s. 5d. for premiums of insurance, and commission due from Lynn to Read, and Lynn had given his promissory note for the said sum of 1,6031. 17s. 5d. to Read, who had negotiated it, and it was proved under the commission. Read had accepted for the accommodation of Lynn bills drawn by Lynn, to the amount of 6,4441. 7s. 4d. none of which had been paid at the bankruptcy, and they were proved under the commission. Read had likewise guaranteed debts of Lynn to the amount of 7731. 1s. 5d. but had not at the bankruptcy paid any part of those debts, and they were proved under the commission. Lynn had given three bills for 1000l. each, drawn by him, on Stalker, to Read, who had negotiated them, and those bills were dishonored, and two of them were proved. The petitioner being insolvent, made a composition, and paid the holders of the bills, accepted for Lynn's accommodation, and the parties whose debts were guaranteed, a composition, amounting to 1,8941. 8s. 8d. The petition prayed that the unpaid bills, or liabilities, might be excluded from both sides of the account, or that the petitioner might debit Lynn's

account with the cash balance of 3,5761. 8s. 4d. and with the balance or difference between the amount of dividends paid by Lynn's estate upon Stalker's bills and Lynn's promissory note, and the amount of the composition paid by the petitioner, and that he might be admitted to prove the balance of the account, according to the declaration of the court. Per Leach V. C. "It is not necessary to refer to Ex parte Walker, and Ex parte Earle (see supra) inasmuch as the Act of 49 Geo. 3. has introduced a new principle, by which cases of this sort must now be tried. By that act, a surety paying after the bankruptcy can only prove against the estate of the bankrupt where the creditor has not proved, or stand in the place of the creditor on the bankrupt's estate, where the creditor has proved, and there cannot be double proof. Let the case of the accommodation bills be first tried by this principle. Read accepts for the accommodation of the bankrupt, bills to the amount of 6,4441. which remain wholly unpaid at the time of the bankruptcy. These bills are all proved by the holders, under the commission, and if Read were now to pay these bills, it would form no ground of further proof, and all that Read could claim would be, to have the benefit of the proofs already made upon these bills against the estate. With respect to the cash balance, that part of it which is represented by the promissory note of 16031. is already proved against the estate by the holder of the note, with whom the petitioner had discounted it, and the actual payment by the petitioner could not give him a larger right than to have the benefit of that proof. The remainder of the cash balance is more than covered by the two bills of Stalker, which have been proved against the bankrupt's estate by the holders with whom the petitioner negotiated them. It is hardly necessary to refer to the debts, amounting to 7731. which were guaranteed by the petition, but which have been proved by the creditors against the bankrupts' estate." Petition dismissed. Ex parte Read, 1 G. &

J. 224.

Proof of bills-under several commissions, and amount of proof.] Where several parties to a bill become bankrupt, the holder is entitled to prove the full amount of the bill under the commissions against each; Ex parte Wildman, 1 Atk. 109. 2 Ves. 113 S. C.; and the bill may be proved against the estates both of the drawers and acceptors, though the same persons may be both drawers and acceptors, as constituting different firms. Ex parte Parr, 18 Ves. 65. 1 Rose, 76. S. C. But where the holder has received a dividend from the estate of one of the parties, he can only prove against the others the amount of the bill, less the amount of the dividend. Thus where the maker and indorser of a promissory note both became bankrupt, and the holder, after receiving a dividend of 6s. in